Stock market today: Dow, S&P 500, Nasdaq futures mixed as the AI trade rebounds

Yahoo Finance’s Claire Boston reports:

Homebuyers are backing out of contracts at near-record rates, a potential sign of how higher mortgage rates are prompting buyers to rethink their plans.

Nationwide, 14.5% of homes fell out of contract in September, according to Redfin data, the highest share on record apart from the early months of the COVID-19 pandemic.

Homes can fall out of contract for a number of reasons, such as inspection findings or financing pitfalls, or when a buyer just has a change of heart. But pending sales tend to fall through at higher rates when buyers have more options and more negotiating power, as they currently do in much of the country.

Read more here.

BofA economists still see an October rate hike on the table, despite most of the market pricing in an unchanged policy decision for next week, and an increase in December.

The economists point out that the inflation picture has gotten worse since the September meeting. However, 85% of market participants expect policymakers to keep rates steady when they meet next week.

“Most of the FOMC was on board with two hikes this year. Why not do the second one in Oct, to retain the optionality for a third in Dec?” wrote BofA economist Aditya Bhave on Monday.

“We have low conviction as to whether he is serious about bringing a “sea change” to the Fed. But we’re giving him the benefit of the doubt, by retaining our Oct hike forecast,” added Bhave.